The New Banking Belle of the South
By LAWRENCE C. STRAUSS
This Southern belle is living up to its boast as the "Best Bank in Town."Article Comments
UNTIL RECENTLY CHARLOTTE, N.C., WAS THE booming banking hub of the South, home to Bank of America (ticker: BAC) and Wachovia. BofA's woes are well documented, and Wachovia was rescued last year by Wells Fargo (WFC).
In nearby Winston-Salem, meanwhile, the much smaller BB&T (BBT) quietly and profitably has been building a bigger footprint across the mid-Atlantic and Southeast. The bank now is a big player in its own right, with assets of $165 billion and a stock-market capitalization of $17 billion.
If BB&T's revenue continues to rise and loan defaults subside, its shares could rally at least 30%, into the low-30s, from Thursday's 24.68. BB&T "is going to be a leader coming out of this cycle," says Lisa Welch, portfolio manager of the John Hancock Regional Bank Fund (FRBAX), which owns shares.
Launched in 1872, BB&T bills itself as "The Best Bank in Town," playing up its status as a community bank with strong customer relationships. That business model has helped its stock hold up well. With a total return this year of negative 5%, BBT has outperformed the KBW Regional Banking Index, which is down 28%.
BBT often wins praise for its solid underwriting and strong revenue growth. But its commercial-real-estate portfolio, amounting to roughly 17% of its $107 billion book of loans and leases, has been cause for concern. "It's clear they have somewhat heavier exposure to commercial real estate than some of their peers," says Jerry Senser, co-portfolio manager of MainStay ICAP Equity (ICAUX), a large-cap value fund that owns the stock. "But historically, they have run a very conservative credit culture, and they will ultimately weather this storm and generate strong earnings."
As of Sept. 30, BB&T held $1.3 billion of foreclosed real estate. But the amount of foreclosed property on its books is leveling off. The largest foreclosed asset is valued at $19 million -- chump change compared with many real-estate developments that have gone awry. BB&T doesn't lend money for huge real-estate projects, which has "kept us out of a lot of the high-rise projects that basically have no rents today," says Chief Financial Officer Daryl Bible.
According to The Almanac of American Employers 2008, the largest public American employers are:
Top 10 Public American Employers Rank Company Type of Business Employees
1 Wal-Mart Retail 1,800,000
2 Kelly Services Staffing/Temporary Help 750,000
3 McDonald's Fast Food 465,000
4 UPS Express Delivery 428,000
5 IBM Computer Hardware 355,766
6 Home Depot Home Retail 345,000
7 Target Retail 338,000
8 Citigroup Banking 337,000
9 General Electric Leasing & Finance 319,000
10 AT&T Staffing/Telephone Service 302,770
Of course the government is the largest employer.
The second 10 according to this almanac are Yum Brands, Verizon, Aramark, Macy's, Berkshire Hathaway, United Technologies, Bank of America, Walgreen's, HCA and Lowes'.
you gonna put everyone on ignore and crawl under a rock and join mold spore?
i've kicked your tail so bad when it becomes predicting the movement of your favorite stock BBT and i hardly focus on this pile of heap while you spend every waking moment fixated on BBT which i classify somewhere in the mist of a large mid-cap stock -- you should have kept reading my post cuz i have nailed everything so perfectly -- i don't care about how good i am, it's you that cares about how bad you are and now your bitter cuz your stock that you stringently focus upon has tossed you a few too many high hurdles and now you have egg on your face cuz you told everyone to go out and buy this trashed bank -- if anyone that deserves to hit the ignore button, it's her, while you say you don't have time to respond to her correctly assessed post in the first place -- yeah, so you run along and go back to your busy schedule of drilling back more into your 90's cycle charts for BBT -- cuz the only thing that is gonna make this crap stock go up is the index -- as long as the banks can keep lobbying their get out of jail card free, then the rally is still intact
You know nothing about me and are a bitter person who projects their attitude on others.
The work I did in the 80s helped the US car companies compete with lower labor cost foreign companies for almost 30 years. I would argue the work I did in automation in the auto industry saved many jobs for a lot of years because of increased productivity.
Since American labor (especially unionized labor) is higher cost than that in less developed countries the difference has to be made up by producing more per man hour.
Back to my original point - the largest manufacturing county in the world is not Japan or China - it is the US. Stop trying to digress because the facts support my assertion and you attemts at changing the topic are futile.
BTW - I do not have the time or desire to respond again to someone who clearly is not all that bright, so you are going on ignore.
That's exactly my point. Productivity has slashed the need for labor, it's done so on a world-wide basis. That's what has sapped jobs, not just off-shoring.
So let's see, unemployment just came out at 10%. If we had the same level of unemployment in manufacturing, net up 10% we'd have a national unemployment rate of ... hmmm ... oh. 0%. Obviously it doesn't work like that mathematically, but the point is, unemployed people don't stimulate economic activity and we've lost a lot of employment in the manufacturing sector.
You really seem to revel in other people's misery. I bet you partied every time you automated something and threw a bunch of people into the street with a pink slip. You are a miserable person, Uncle Inlet.
China's GDP is about a third of America, but it's built on a strong currency based on manufacturing and savings.
America has an economy built on a negative savings rate and consumerism financed by a stock market bubble, real estate bubble and most recently a doubling of the money supply and a 20% increase in the national debt.
There is no comparison.
Have you ever worked in a manufacturing environment? Clearly you haven't. The # of people employed in manufacturing has little to do with the level of manufactured output (compared to the past). The auto manufacturing in the US had more units output than 1980 when employment in auto manufacturing was 3X 2007.
Have you ever heard of productivity increases? Yes, that is where you automate operations or in outhr ways get more output per human labor hour.
As I spent time in the early 80s automating many areas of auto manufacturing I have a "clue" on the subject of manufacting and output per labor hour.
Now go buy a clue. China's economy is about 1/10 the size of the US economy and it will be some years before their manufacturing equals ours even if they continue to expand it 7-8% a year.
Roubini: U.S. Has Two Economies
Tuesday, December 1, 2009 2:01 PM
By: Julie Crawshaw
The U.S. has two economies, says Nouriel Roubini, professor of economics at New York University's Stern School of Business and chairman of RGE Monitor.
"There is a smaller one that is slowly recovering and a larger one that is still in a deep and persistent downturn," Roubini writes.
Roubini notes that while America's official unemployment rate is 10.2 per cent, the figure jumps to a whopping 17.5 per cent when discouraged workers and partially employed workers are included.
And, while data from firms suggest that job losses in the past three months were about 600,000, household surveys, which include self-employed workers and small entrepreneurs, suggest a number above two million.
“Many of the lost jobs — in construction, finance, and outsourced manufacturing and services — are gone forever, and recent studies suggest that a quarter of U.S. jobs can be fully outsourced over time to other countries,” Roubini says.
Credit markets are another indicator of his two-economy analogy, Roubini says.
“Prime borrowers with good credit scores and investment-grade firms are not experiencing a credit crunch at this point,” he points out.
“Non-prime borrowers – about one-third of U.S. households – do not have much access to mortgages and credit cards and live from paycheck to paycheck,” Roubini notes. “And the credit crunch for non-investment-grade firms and smaller firms, which rely mostly on access to bank loans rather than capital markets, is still severe.”
There are six times as many Americans seeking work as there are job openings, says Nobel prize-winning economist Paul Krugman.
“… the average duration of unemployment — the time the average job-seeker has spent looking for work — is more than six months, the highest level since the 1930s,” Krugman writes in The New York Times.
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